DePaul Journal of Art, Technology DePaul Journal of Art, Technology

& Intellectual Property Law & Intellectual Property Law

Volume 16 Issue 1 Fall 2005 Article 5

Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005) Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

James Drysdale

Follow this and additional works at: https://via.library.depaul.edu/jatip

Recommended Citation Recommended Citation James Drysdale, Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005), 16 DePaul J. Art, Tech. & Intell. Prop. L. 161 (2005) Available at: https://via.library.depaul.edu/jatip/vol16/iss1/5

This Case Summaries is brought to you for free and open access by the College of Law at Via Sapientiae. It has been accepted for inclusion in DePaul Journal of Art, Technology & Intellectual Property Law by an authorized editor of Via Sapientiae. For more information, please contact digitalservices@depaul.edu.

CASE SUMMARIES

MALEWICZ V. CITY OF AMSTERDAM

362 F. Supp. 2d 298 (D.D.C. 2005)

I. INTRODUCTION

In Malewicz v. City of Amsterdam, the United States DistrictCourt for the District of Columbia was asked to determineownership of a collection of artwork by Kazimir Malewicz.1 Theartist's heirs presented a claim of expropriation against the City ofAmsterdam, which, at the time, had housed the Malewiczcollection at its Stedelijk Musuem since 1956.2 In 2003, whilefourteen of the works in question were on loan from the Stedelijkto two museums in the United States, the Malewicz heirs filed suitin the District of Columbia seeking return of the artwork anddamages.

3

The district court first sought to determine whether it hadjurisdiction to hear the case in accordance with the ForeignSovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 et seq. 4

The Malewicz heirs averred that under Section 1605(a)(3) of theFSIA, a party could bring suit "against a foreign sovereign when(1) rights in property were taken in violation of international law,(2) the property is present in the United States, and (3) the propertyhas a connection to a commercial activity in the United Statesconducted by a foreign state."5 The court considered each of thethree prongs of the FSIA section in turn. First, the court deemed itunnecessary to determine whether rights in property were taken inviolation of international law, observing that any "substantial andnon-frivolous" claim provided a basis for consideration of

1. Malewicz v. City of Amsterdam, 362 F. Supp. 2d 298 (D.D.C. 2005).2. Id. at 302.3. Id. at 300.4. Id. at 306.5. Id.

1

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

DEPAULJ.ART &ENT.LAW [Vol. XVI:161

jurisdiction. 6 Next, the court concluded that by filing a claim ofownership while the artwork was on display in the United States,the heirs had sufficiently established "presence in the UnitedStates," notwithstanding the fact that the paintings and drawingshad been returned to Amsterdam by the time the case was heard.7Finally, the court found that Amsterdam's loan of the artwork was''commercial activity," but stated that the record was insufficient todetermine whether the City's contacts with the United States weresufficient to subject it to FSIA jurisdiction. 8

Accordingly, the court denied the City's motion to dismiss andordered further development of the record to determine whetherthe loan of cultural and educational artworks constitutedsubstantial contact between the City of Amsterdam and the UnitedStates within the meaning of 28 U.S.C. § 1603(e).9

II. BACKGROUND

After exhibiting over 100 works of art in Berlin in 1927,Kazimir Malewiczl ° entrusted his canvases to several friends inGermany for safekeeping and storage." The art could not safelybe returned to Russia because of a Stalinist condemnation ofabstract art.12 Malewicz died in May of 1935.13 By 1937, theMalewicz works would not have been acceptable for display to thegovernments of either Russia or Germany.14 Therefore, theMalewicz works were shipped to one Mr. Haring for storage inBerlin, Germany.' 5 Between the years 1951 and 1956, the directorof the Stedelijk Museum in Amsterdam, as well as other museum

6. Id. at 306-07 (citing Crist v. Republic of Turkey, 995 F. Supp. 5, 10-11(D.D.C. 1998)).

7. Malewicz, 362 F. Supp. 2d at 311.8. Id. at 314-15.9. Id. at 316.10. Kazimir Malewicz is a world-renowned Russian artist. He worked in the

years prior to World War II and was a significant influence in the history ofabstract art. Id. at 301.

11. Id.12. Id.13. Malewicz, 362 F. Supp. 2d at 301.14. Id.15. Id.

2

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5

MALE WICZ V. CITY OF AMSTERDAM

directors, tried to persuade Haring to send the Malewicz Collectionto the Stedelijk for restoration and exhibition.' 6 Haring refused todo so and repeatedly emphasized that he was only responsible forsafekeeping of the canvasses and had no right to convey ownershipof them to anyone. 17 In February 1956, Haring finally agreed tolend the works to the Stedelijk. 18

A letter sent to the Stedelijk, dated June 23, 1956, signed "onbehalf' of Haring but not by him, announced that under Germanlaw, ownership of the Malewicz works had passed to Haring in1955.19 The letter also stated that Haing possessed a notarialexposition of his acquisition of ownership based on a purportedgift causa mortis by Malewicz to Haring of the works left inBerlin.20 Therefore, the letter concluded, Haring had the power tosell the works to Amsterdam. 21 In reliance on the letter, the Cityof Amsterdam entered into a loan contract with Haring inNovember 1956 that contained an option to purchase the MalewiczCollection.22 The City claimed to have exercised that option in1958.23

The Malewicz heirs filed suit alleging that the letter wasfraudulent and was known as such by the director of the Stedelijkbecause of his prior conversations with Haring.24 Further, theheirs alleged that Amsterdam and the Stedelijk concealed thenature of the acquisition, claiming that both knew Haring had noauthority to convey title, had consistently denied such authority,and had never claimed that Malewicz intended to transfer thecollection to him upon death.25 The heirs first asked Amsterdamto return the collection to them in 1996.26 The City responded thatits acquisition of the Malewicz Collection was valid and that it had

16. Id.17. Id.18. Id. at 302.19. Malewicz, 362 F. Supp. 2d at 302.20. Id.21. Id.22. Id.23. Id. at 303.24. Id.25. Malewicz, 362 F. Supp. 2d at 303.26. Id.

2005]

3

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

164 DEPAULJ.ART &ENT. LAW [Vol.XVI:161

become the owner of the Malewicz Collection in 1958. 27 Even ifthis were not so, the City continued, it nevertheless became theowner on January 1, 1993, through acquisitive prescription inaccordance with the Dutch Civil Code.28

In 2003, fourteen of the eighty-four pieces in the MalewiczCollection were exported to the United States to be part of atemporary exhibition of artwork at the Solomon R. GuggenheimMuseum in New York City and the Menil Collection in Houston.2 9

These exhibitions were arranged under the terms of the MutualEducational and Cultural Exchange Program 30 administered by theU.S. Department of State.31 Pursuant to the terms of § 2459 of theState Department's exchange program, the artworks were immunefrom seizure and other forms of judicial process that might havehad the purpose or effect of depriving the Guggenheim or theMenil Collection (or any carrier) of custody or control of theartworks while in the United States. 32 The Malewicz heirs filed acomplaint two days before the Houston exhibit closed.33 Theartwork was returned to Amsterdam as scheduled, prior to the Citybeing served with notice of the Malewicz' complaint. 34 Inresponse to the complaint, the City filed a motion to dismiss.35

III. LEGAL ANALYSIS

As a preliminary matter, the court noted that the burden ofestablishing jurisdiction fell upon the plaintiff.36 The court alsorecognized the Foreign Sovereign Immunity Act ("FSIA") as theexclusive means of exercising jurisdiction over foreign sovereigns(the City of Amsterdam qualified as a foreign sovereign).37 Next,

27. Id.28. Id.29. Id.30. 22 U.S.C. § 2459 (2005).31. Malewicz, 362 F. Supp. 2d at 303.32. Id.

33. Id.34. Id.35. Id.36. Id. at 305.37. Malewicz, 362 F. Supp. 2d at 306.

4

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5

MALEWICZ V CITY OF AMSTERDAM

the district court stated that a motion to dismiss, when based on aclaim of foreign sovereign immunity, provides protection from suitand not merely a defense to liability.3 s Thus, the court found thatAmsterdam would be immune from the jurisdiction of the courtsof the United States unless one of the FSIA statutory exceptionsapplied to the present case.39 The Malewicz heirs relied upon anexception that "allows a suit against a foreign sovereign when (1)rights in property were taken in violation of international law, (2)the property is present in the United States, and (3) the propertyhas a connection to a commercial activity in the United Statesconducted by the foreign state." 40 The City of Amsterdam movedto dismiss, arguing that none of the three factors of the §1605(a)(3) exception could be satisfied. The court noted that theCity bore "the burden of proving that the plaintiffts]' allegations[did] not bring [their] case within a statutory exception toimmunity., 41 In considering its jurisdiction, the court analyzedeach of the three criteria of FSIA § 1605(a)(3) in turn.

A. Were Rights in Property Taken in Violation of InternationalLaw?

1. Clearly Inadequate Remedies

The City argued that the Malewicz heirs could not claim anexpropriation in violation of international law in the district courtbecause they had failed to exhaust their remedies in the courts ofthe Netherlands.42 The court noted that a claimant cannotcomplain that a taking violates international law unless theclaimant has "exhausted domestic remedies in the foreign state thatis alleged to have caused the injury." 43

38. Id.39. Id.40. Id. (quoting 28 U.S.C. § 1605(a)(3)).41. Id. at 306 (quoting Phoenix Consulting Inc. v. Republic of Angola, 216

F.3d 36, 40 (D.C. Cir. 2000)).42. Id.43. Malewicz, 362 F. Supp. 2d at 307 (quoting Millicom Int'l Cellular v.

Republic of Costa Rica, 995 F. Supp. 14, 23 (D.D.C. 1998)).

2005]

5

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

DEPAULJ.ART &ENT. LAW [Vol. XVI:161

The Malewicz heirs countered by arguing that exhaustion oflocal remedies was not required, because remedies available in thecourts of The Netherlands were clearly inadequate. 44 The heirsargued that the statute of limitations would be a complete defenseif the action were brought in the Netherlands, and the case shouldnot be dismissed where an alternate forum (a Dutch court) wouldnot provide an adequate remedy. 45

The court agreed that an alternative forum in which the plaintiffcould recover nothing for a valid claim would not be adequate.46

The court held that were the Dutch statute of limitations to barplaintiffs claims, Dutch courts would not be a valid alternativeforum.47 The court noted that under the laws of the District ofColumbia, it could not require the plaintiffs to take their case to aDutch court unless the City of Amsterdam waived its statute-of-limitations defense and the Dutch court accepted that waiver. 48

However, the court concluded that the record was factuallyinsufficient to determine when the Dutch statute of limitations hadbegun to run, and whether it would ultimately bar Plaintiffs'claims.

49

2. State Denial of Responsibility

The Malewicz heirs argued that they were not required to filesuit in the Dutch courts because the City "denied anyresponsibility., 5 0 The court summarily dismissed this argument bystating, "[a]lthough the City of Amsterdam has denied that itviolated the rights of the Malewicz Heirs, it does not deny

44. Id.45. Id.46. Id.47. Id.48. Id. at 308 (citing Mills v. Aetna Fire Underwriters Ins. Co., 511 A.2d 8,

13 (D.C. 1986)).49. Malewicz, 362 F. Supp. 2d at 308.50. Id. The heirs relied on the proposition that "local exhaustion of remedies

does not apply 'when the claim is for injury for which the respondent statefirmly denies responsibility."' Id. (quoting McKesson Corp. v. Islamic Republicof Iran, No. 82-220, 1997 U.S. Dist. LEXIS 8903, at *53 n.25 (D.D.C. June 23,1997)(aff'd in part & rev'd in part, 271 F.3d 1101 (D.C. Cir 2001)).

6

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5

MALE WICZ V CITY OF AMSTERDAM

'responsibility' for the acquisition of the Malewicz Collection."5'

The district court found that the City had not denied responsibilityfor its actions, but rather the alleged illegality of thoseactions.5 2Therefore, the court held that if the alternative forumwere available, the state "denial" of illegality would not besufficient to preclude requiring the heirs to exhaust localremedies.5 3 While the court's analysis on this point was brief, itclearly distinguished the denial of responsibility from the denial ofillegality.

5 4

B. Was The Property Present in the United States?

1. Physical Presence

The City of Amsterdam argued that the artwork was not "presentin the United States" as a matter of fact when the City wasserved. 5 Amsterdam likened FSIA § 1605(a)(3) to an in remaction, arguing that "jurisdiction in an in rem action vests onlyupon assertion of judicial authority over the res and not upon thefiling of opening papers."5 6 Thus, the City averred that becauseauthority over the res could not be obtained by seizure due to theImmunity from Seizure Act, such authority could not be "regardedas equivalent to the particular service of process in the courts oflaw and equity.",5

7

The court disagreed with Amsterdam's argument, stating that itignored the "history and purpose of FSIA."'s According to thecourt, the State Department adopted a "restrictive theory" ofsovereign immunity in 1952, whereby a sovereign acting "withregard to sovereign or public acts (jure imperii) of a state" wouldbe granted immunity, but no immunity would be recognized "with

51. Id.52. Id.53. Id.54. Id.55. Malewicz, 362 F. Supp. 2d at 309.56. Id.57. Id. (quoting Taylor v. Carryl, 61 U.S. 583, 590 (1857)).58. Id.

2005]

7

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

DEPAULJ ART &ENT.LAW [Vol. XVI:161

respect to private acts (jure gestionis).,,5 9 Because of inconsistentstandards in applying restrictive theories of sovereign immunitybetween the Executive and Judicial Branches, the court stated,Congress passed FSIA in 1976 to place "primary responsibility forinterpreting and applying FSIA standards in the Judiciary."60 Thedistrict court found that FSIA intentionally overrode the common-law requirement that a plaintiff obtain in rem jurisdiction beforesuit could be filed against a foreign sovereign.61

In applying the aforementioned reading of the "history andpurpose" of FSIA, the court stated it "would be anomalous to re-insert the jurisdictional requirements of an in rem action whenCongress so clearly intended to remove them fromconsideration." 62 Accordingly, the court held that the Plaintiffs'filing of the complaint while the artworks were physically presentin the United States was sufficient to meet the "present in theUnited States" factor of FSIA without regard to later service of thecomplaint.

63

2. Legal Presence

Amsterdam also argued that the artwork was not present in theUnited States as a matter of law during the course of theexhibitions.64 The Malewicz heirs could not seek to seize theartworks while they were in United States due to § 2459immunity.65 Moreover, the plaintiffs did not contend that theycould have filed the FSIA suit prior to the importation of the worksor following their departure. 66 The court acknowledged that the"Plaintiffs [used] the window of opportunity afforded by theMalewicz exhibitions as the jurisdictional hook for their claims." 67

59. Id. (quoting Verlindin B. V. v. Central Bank of Nigeria, 461 U.S. 480,486 (1983)).

60. Id.61. Malewicz, 362 F. Supp. 2d at 309.62. Id.63. Id.64. Id. at 309.65. Id. at 310; see supra text accompanying notes 31-32.66. Id.67. Malewicz, 362 F. Supp. 2d at 310 (quoting U.S. Statement at 4).

8

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5

2005] MALE WICZ V CITY OF AMSTERDAM 169

The United States, as an interested party, argued that "§ 1605(a)(3)of FSIA requires a sufficient nexus with the United States toprovide fair notice to foreign states that they are submittingthemselves to U.S. jurisdiction and abrogating their sovereignimmunity. ' 68 However, the district court found the connectionunder § 1605(a)(3) to indicate that a foreign state carrying on acommercial activity in this country and not conducting itself as asovereign was subject to the exception. 69

The City argued that the fourteen Malewicz works wereprotected from judicial process by § 2459 and therefore not presentin the United States for legal purposes.7 0 However, the courtfound that granting immunity under § 2459 and establishingjurisdiction for certain claims against a foreign sovereign pursuantto § 1605(a)(3) were "both clear and not inconsistent with oneanother."7' As such, the court noted it was bound to the plainmeaning of the statutes.72 The court approved the reading of thestatutes offered by the Malewicz heirs; specifically, the court heldthat the two statutes were "unrelated except that a culturalexchange might provide the basis for contested property to bepresent in the United States and susceptible, in the right factpattern, to a FSIA suit."'73 The district court reasoned that alitigant with a claim against a foreign sovereign may not seize thatsovereign's property that is in this country on a cultural exchangeand may not serve the receiving museum with judicial process asto interfere with physical custody or control of the works.74 Thecourt stated that the Malewicz heirs had attempted neither.75

Accordingly, the court held that the absence of the artworksfrom the United States might make a court order to return theworks to the Malewicz heirs "only as valuable as their ability topersuade a Dutch court to enforce it but, because of § 2459, the

68. Id. (quoting U.S. Statement at 6-7).69. Id. at310-11.70. Id. at311.71. Id.72. Id.73. Malewicz, 362 F. Supp. 2d at 311.74. Id.75. Id.

9

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

DEPAULJ.ART &ENT. LAW [Vol. XVI:161

presence or absence of the property made no difference during thelitigation, as long as it was present when [the] suit was filed.,7 6

Thus, the court held that the artworks were "present in the UnitedStates" for purposes of FSIA jurisdiction.77

C. Was There Commercial Activity by the Foreign State?

The Malewicz heirs' complaint stated that the fourteenMalewicz pieces were in the United States in connection with acommercial activity carried on in the United States byAmsterdam. 78 The United States, in a statement filed as aninterested party, advised that "the possibility that such a minimallevel of contact will necessarily suffice to provide jurisdictionthreatens to chill the willingness of sovereign lenders to participatein the section 2459 program., 79 The City also protested that it wasmerely a "lender from a distance" and not engaged in commercialactivity in the United States. 80

To begin its analysis, the district court cited the Supreme Courtholding in Republic of Argentina v. Weltover, Inc., "[b]ecause the[Foreign Sovereign Immunity] Act provides that the commercialcharacter of an act is to be determined by reference to its 'nature'rather than its 'purpose,' the issue is whether the particular actionsthat the foreign state performs (whatever the motive behind them)are the type of actions by which a private party engages in 'tradeand traffic or commerce."' 81 Thus, the district court reasoned, ifan act is something only sovereigns do, it is not "commercial," andsimilarly, if an act is something that a private person or entity cando, it is not "sovereign"; therefore, "'commercial' means only 'notsovereign."

82

With this understanding, the court held that it was clear the Cityof Amsterdam engaged in "commercial activities" when it loaned

76. Id. at 311-12.77.78. Id. at 312.79. Id.80. Malewicz, 362 F. Supp. 2d at 312.81. Id. at 313 (citing Republic of Argentina v. Weltover, Inc., 504 U.S. 607

(1992)).82. Id.

10

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5

MALE WICZ V. CITY OF AMSTERDAM

the fourteen Malewicz works to museums in the United Statessince "[t]here is nothing 'sovereign' about the act of lending artpieces, even though the pieces themselves might belong to asovereign."

83

Amsterdam and the United States argued that the City's contactswith the United States were too insubstantial and insufficient toexpose it to FSIA jurisdiction. 84 They both contended that thepossibility that such a minimal level of contact would necessarilysuffice to provide jurisdiction threatened to chill the entireinternational exchange program. .5

The district court found that the existing record did not permitthe Court to ascertain the substantiality of the City's contacts oractivities with or in the United States in connection with the loanof the Malewicz artworks. 86 The court posed a number ofquestions that would factor into a calculus of substantiality in thiscase: (i) "whether apart from the presence of the artworksthemselves, what were the terms of the loan agreements"; (ii) "didthe Stedelijk send any representatives to this country to work outarrangements, to travel with the art, or to oversee its safety anddisplay"; and (iii) "what consideration did the Guggenheim orMenil Collection offer for the loan-money, a future loan ofAmerican art to The Netherlands, a share in any receipts fromvisitors, catalogue sales, and the like-or was this only a courtesybetween professionals in the art world, as the City argues." 87 Priorto making any determination as to jurisdiction, the court deemed itnecessary to obtain additional information regarding the extent andthe nature of the City of Amsterdam's contacts with the United

88States. Accordingly, the court deferred making a jurisdictionaldetermination, requesting further development of the record.89

83. Id.84. Id. at 315.85. Id.86. Malewicz, 362 F. Supp. 2d at 315.87. Id.88. Id.89. Id. at 315-16.

2005]

11

Drysdale: Malewicz v. City of Amsterdam 362 F. SUPP. 2D 298 (D.D.C. 2005)

Published by Via Sapientiae, 2016

172 DEPAULJ.ART &ENT. LAW [Vol. XVI:161

IV. CONCLUSION

The court denied the City of Amsterdam's motion to dismiss sothat the record evidence could be developed relating to the city'scontact with the United States. The court also instructeddevelopment regarding the first prong of its FSIA § 1605(a)(3)concerns, namely, whether the Netherlands would waive its statuteof limitations defenses as to provide an alternative forum for thelitigation.

James Drysdale

12

DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 16, Iss. 1 [2016], Art. 5

https://via.library.depaul.edu/jatip/vol16/iss1/5